November 17, 2021
Markets

Job hole or inflation? Fed policymakers split over risk view

The Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 27, 2019. REUTERS/Brendan McDermid/File Photo

June 24 (Reuters) – As Federal Reserve policymakers begin an intense debate over when and how to start reducing the central bank’s support for the economy, they are split over what poses the bigger risk: a still-large jobs deficit or a potential inflation shock.

Robert Kaplan and James Bullard, chiefs respectively of the Dallas and St. Louis Fed banks, on Thursday both warned that inflation could stay higher for longer than many of their colleagues may anticipate.

“Policymakers will have to take this new risk into account in the months and quarters ahead,” Bullard told the Clayton Chamber of Commerce near St. Louis.

Kaplan, speaking to the Headliners Club of Austin, said he sees “upside risk” to his projection for 2.4% or 2.5% inflation next year,…

Read full article here: www.reuters.com